Be Careful with Credit Cards

The whole appeal of credit cards is the ability for consumers to "have it now, pay later."

The problem lies when "later" ends up becoming much, much later. The debt incurred for late payments of a statement is one of the bigger ways credit card companies make money, and one of the many ways you lose money.

Many credit card promos involve offering low or zero interest rates for a certain period, but oftentimes the overdue fees are not waived.

It's important, not just for credit card transactions but as a good habit in general, to keep mental track of your expenses. It's easy to do if you use your card infrequently, but if you use it to buy soap today, and then towels tomorrow, and then a videogame the next day, and groceries the day after, not to mention your subscriptions to National Geographic as well as the electric and water bills, etcetera, you may lose track of just how much you've already spent, and how much you still need to spend. A large interest accumulation and, possibly, penalties due to overspending beyond your credit limit, are potential problems you'll have to face.

The best thing you can do to save money using plastic is to pay quickly. You do *not* have to wait until you receive your statement before you pay your dues. What I've done, for example, is set my credit card account as one of the billing options in my savings account's online interface. That way, as soon as I get home after charging to my card, I can quickly go online and pay the bill.

Also, remember the advantages your credit card company offers. Bonus Points, discounts, freebies, express service at select stores, these are all part of the perks of the plastic.